▶ Full Post Text
Hello, I have a question about how I should manage the chunk of money I have for investment and retirement, but some background is necessary.
I'm going to be 30 year this year. I worked for five years at a big tech company, where I maxed out my 401k for about 3 of the years there and still contributed for the other 2. The current market value is around $145k. After 5 years, I quit and used some of the stock + other savings to fund my master's degree, and didn't save for retirement during that time because I was living abroad and had no income (technically, 2024 was the only year I didn't save any retirement). Now I'm back in the USA and in a PhD program, where I am grateful to get paid but given that I live in NYC, it isn't very much. I sold the last of my company stock, which gave me a lump $60k. Since I'm making very little money, but I still want to contribute to my retirement, I would like to use a significant portion of the $60k for my retirement. I have already maxed out my roth IRA for 2025 and 2026, leaving me with about $46k.
I'll be in my PhD program likely until 2031, so I would ideally max out my Roth IRA each coming year (2027, 2028, 2029, 2030, 2031) until then (this would be at least somewhere in the $38k to $42k range depending on if/when they adjust the contribution limit again).
The question I have is where it is best for me to put the money in the meantime? Since I can't put this money into a Roth IRA now, obviously.
My first thought is that if I put the money into my brokerage account in VOO or something similar, each year I can sell some each year and transfer that money into a Roth IRA. If I make a gain, I obviously have to pay taxes on it, but at least the money has grown, and if it goes down, I have the loss to offset other years.
The other option I've considered is to put this money in something fixed like a CD where I know I will get a consistent interest rate and the CD will end in the year I need to move it into a Roth. This seems like I would leave a lot on the table.
This is a bit of a weird situation and I would love anyone's perspective on it.